Mayor asks county to pay $10 million for Dynamo stadium

Mayor asks county for $10 million toward Dynamo stadium

CAROLYN FEIBEL, Copyright 2008 Houston Chronicle

Published 5:30 am, Wednesday, August 20, 2008

Mayor Bill White has asked Harris County to join the city in a Dynamo stadium deal, hinting that a $10 million contribution by the county may be the final step needed to finalize a deal with the soccer franchise.

"I'd say the most important issue is how might the county participate," White said.

County Judge Ed Emmett confirmed that Commissioners Court support could be crucial: "I think there's a $10 million shortfall somewhere in their negotiations, and they're looking for a way to do that."

Under a tax increment reinvestment zone, property tax revenues generated within the boundaries are frozen at the level when the zone was created. As development occurs and property values rise, tax revenue above that level — known as the increment — is funneled back into the zone to pay for improvements to help attract more investment.

City officials are proposing that Harris County join in the East Downtown TIRZ, forgoing $10 million of its share of property taxes from the area.

Offsetting the costs

That money would be combined with the city's share and funneled to the stadium project. The county later would make up the money after the stadium is built and the economically invigorated neighborhood starts generating more property taxes, Emmett said.

"It's got to be something that the increased value that's generated by the stadium would be used to offset the cost," Emmett said.

Garcia said she was undecided and still examining the financial projections. "Does it make sense financially? Should we participate at all?" she asked.

Although a Dynamo season ticket holder, Garcia said she would decide "to do what's right for the taxpayer."

Lee did not return a call for comment.

The city has spent $15.5 million in public funds to buy land downtown where the Dynamo would like to build. The six-block site is between Texas and Walker streets on the north and south, and Hutchins and Dowling streets, just east of U.S. 59 in an area undergoing loft-style residential development.

White said he expected the Dynamo contribution to the cost to be about $80 million.

"It's certainly in that ballpark," said Dynamo CEO Oliver Luck, declining to confirm an exact figure.

"I would say that county participation is very important," he added.

Harris County Commissioners has participated in just 10 of the 22 TIRZs created by Houston officials.

"Everybody has a little bit of hesitation to go into a tax increment reinvestment zone, because maybe they were used too much, earlier," Emmett said.

Banking on the future

The judge pointed out that if a stadium is built, the city will capture sales tax revenue from events, but the county cannot.

If the Dynamo owners agree to deed the stadium over to the city, as White wishes, Harris County will only get future property tax revenues from businesses that spring up and grow around the stadium.

The county declined to join the East Downtown TIRZ when it was created in 1999.

But a soccer stadium could change the economic forecast for the area known as the "warehouse district."

"So, we need to look at it again and make sure it makes sense for Harris County taxpayers," Garcia sad. "We just lowered our tax rate, we have a jail overcrowding issue, we have a lot of needs at the county, I've got to keep it all in perspective and find a balance."

"As a general rule, we don't participate in city TIRZes unless there's an infrastructure or some improvement that is a county project that we hope the TIRZ will contribute to."